The Lawletter Vol 42 No 4
Most attorneys encounter situations in which a client does not pay the legal fees due and owing. There may, or may not, be a dispute over services rendered. Every state bar association has some form of fee dispute resolution program, yet some clients do not participate, leaving the attorney few options. At some point it becomes evident that the attorney-client relationship has terminated and the relationship with the prior client becomes adversarial in nature. The question thus arises: If the attorney pursues an action against the client to recover the fee, and obtains a judgement against a former client, may the attorney disclose confidential information obtained during the course of the representation while seeking to execute on that judgment?
Model Rule 1.6(b) allows an attorney to disclose information to "establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client; to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved; or to respond to allegations in any proceeding concerning the lawyer's representation of the client." In 2016 Formal Ethics Opinion 4 (N.C. State Bar), 2017 WL 600139 (adopted Jan. 2017), the North Carolina State Bar opined that despite the provisions of the Model Rule quoted above, the client's confidential information concerning locations of assets or account numbers were not subject to disclosure.
In that opinion the attorney in a domestic matter learned the existence and location of various bank accounts held by the client. Although the attorney was not aware if the information was current, the attorney could not disclose that information to the sheriff in an effort to execute upon the judgment. The North Carolina State Bar reasoned that the controversy between the attorney and client had actually terminated with the entry of a judgment. The comments to Rule 1.6 which anticipated fee disputes allowed a disclosure of confidential information solely for the purposes of proving the services rendered. Since those services had already been established, the provisions of Rule 1.6(b) allowing disclosure no longer applied. The firm was left to utilize the same postjudgment procedures traditionally available to obtain information about a client's assets, but could not use confidential information.